During its E3 press conference, Sony Computer Entertainment America has announced a new hardware as well as its PlayStation 2 online strategy. Sony Computer Entertainment President and CEO Ken Kutaragi revealed that contrary to earlier statements, his company was developing a portable game device known as PSP or PlayStation Portable. Dubbed as the "Walkman of the 21st century", the handheld will use Sony's own 2.4 inch, 1.8GB UMDs (Universal Media Discs) as medium. Its core will be a CPU capable of displaying 3D polygons and curved surfaces. Available in late 2004, the PSP will also offer USB2.0 support, thereby allow users to connect to its big brother PlayStation 2, a PC or cell-phone. Another piece of Sony technology, memory sticks will also be supported.

This fall, Sony Computer Entertainment America will begin shipping the new SCPH-50000 model of its PlayStation 2. Compared to previous models, the updated PS2 will offer advanced recordable media support, DVD progressive scan output as well as ventilation system producing far less noise than its predecessors. Bundled with SCE's network adaptor, the SCPH-50000 will be available for 199.99 USD. In order to clear inventory, the price of the current PlayStation 2 model has been cut to 179.99 USD. As the last part of SCEA's online strategy, the harddisk drive will be available alongside Square Enix's Final Fantasy XI sometime in early 2004.